California in general has slowed since the first of the year for sales and listings. In the 4th quarter of 2015 the average day showed 600-800 new listings with 450-500 pending sales. Now, in January we are seeing an average of 200 new listings and 100 pending sales. The Days on the Market from list to close has extended from 37 to 68. This is due to several factors: Higher Interest Rates, TRID compliance, and our weather and other disaster issues. Namely, Northern California has experienced heavy rains and much flooding. Southern California although experiencing heavy rains, did better than expected in the flooding and evacuations. More El Nino rains are expected this month. This will slow buyers and closings even more. The expectation is that during this period housing movement will be less than stable.
The biggest disaster currently existing and which Governor Brown sited as an Emergency Area is the Porter Ranch area approximately 20 miles North of Los Angeles. The local Gas Co has been experiencing a gas leak in its equipment since October. Currently there are over 2500 households that have been relocated out of the area due to fumes and subsequent alleged illnesses directly related to the gas leak. These homes remain empty. Experts are saying the home prices in the area have dropped 25% and will continue to drop as the saga continues. The Gas Co is stating it will be no sooner than April before they get a handle on what they will be doing to make this situation better.
Two local schools have closed and moved all students to different campuses. Many small businesses have closed. Shoppers are going to other markets, stores, banks, churches. The entire community is in limbo. The seriousness of the situation can be seen at many meetings locally and with the involvement of Erin Brockovich. The decline in pricing in these areas remains to be seen. Investors are watching and waiting to see if it makes financial sense to scoop up some of these properties and hold them until the situation clears.